The standard deduction for 2020 will be $12,400 for single filers and $24,800 for married couples filing jointly. The gift and estate tax exemption will be $11.58 million (up from $11.40 million for 2019). Some figures will remain the same. For example, the exemption from the kiddie tax for 2020 will be $2,200 (same as for 2019). To learn more 2020 inflation-adjusted numbers: https://bit.ly/2WPFy8b
The IRS also announced the 2020 cost-of-living adjustments with respect to retirement plan contribution limits. Many dollar limits will change because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. Key figures include: elective annual deferrals to 401(k) and 403(b) plans will increase $500 to $19,500. The maximum contribution to a defined benefit plan will increase $1,000 to $57,000. The annual limit for defined benefit plans will increase $5,000 to $230,000. Contributions to defined benefit plans increase $1,000 to $57,000. Maximum contributions to IRAs will remain the same at $6,000.
For additional numbers, please visit the IRS website.
If you have any questions, please contact one of our tax professionals at (973) 298-8500.